In an article where McCain urges strippers to work for bigger bills and the $1 bill, there is this bit:
The Arizona Republican joined Sens. Tom Harkin, Tom Coburn, Mike Enzi and Mark Udall in introducing the COINS Act last month, arguing that a dollar coin would save the federal government billions in printing costs
These knuckleheads are forgetting seigniorage. If it costs less than a dollar to print a dollar note, the government makes money when they sell the dollars into the economy. Printing dollar notes is a source of “profit” for the government.
Also, there is a lot of institutional and cultural (think strippers) barriers to overcome before there is wide spread acceptance of a dollar coin in the U.S. Take a look inside a cash register drawer the next time you are at the grocery. There are lots of cash register drawers in the U.S. And why should a new coin be accepted any better than the Sacagawea dollar coin?
I was going to end the post right there.
But then I went off and googled COINS Act. Take a look at the first result of that search: The Dollar Coin Alliance! This a group of concerns that will no doubt benefit from the switch away from a dollar note to a dollar coin. Here is a shot of the membership list:
Our government is so fucked up. You can’t even have an honest discussion about the merits of dollar notes vs. dollar coins without it immediately descending into a battle between the groups that will benefit financially from the policy changes. The Dollar Coin Alliance claims that this COINS Act will save the government money. You can see just by looking at the list of membership above that this claim is not true.
The government will lose the seigniorage on dollar note replacement and these guys will capture the business of minting new coins.
Yes, the government will still get seigniorage on the coins, but the coins won’t be replaced at the rate of the notes. Thereby significantly reducing the amount of seigniorage.